When the lenses of the reasoning process are duly adjusted with their focus on the picture, the picture gets sharpened and haziness disappears. One can clearly view that prohibition on the exhibition of dubbed serial on the television prevented the competing parties in pursuing their commercial activities. Thus, the CCI rightly observed that the protection in the name of the language goes against the interest of the competition, depriving the consumers of exercising their choice. Acts of Coordination Committee definitely caused harm to consumers by depriving them from watching the dubbed serial on TV channel; albeit for a brief period. It also hindered competition in the market by barring dubbed TV serials from exhibition on TV channels in the State of West Bengal. It amounted to creating barriers to the entry of new content in the said dubbed TV serial. Such act and conduct also limited the supply of serial dubbed in Bangla, which amounts to violation of the provision of Section 3(3)(b) of the Act.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6691 OF 2014
|COMPETITION COMMISSION OF INDIA |…APPELLANT |
|VERSUS | |
|CO-ORDINATION COMMITTEE OF ARTISTS AND | |
|TECHNICIANS OF W.B. FILM AND TELEVISION AND| |
|ORS. |…RESPONDENTS |
J U D G M E N T
A.K. SIKRI, J.

This appeal raises an interesting and important question
of law touching upon the width and scope of jurisdiction of the Competition
Commission of India (for short, the ‘CCI’) under Section 3 of the
Competition Act, 2002 (hereinafter referred to as the ‘Act’). Before we
mention the nuances of the issue that has arisen for consideration, it
would be apposite to take stock of the background facts under which the
issue needs determination, as the factual canvass would provide clarity of
the situation that has led to the dispute between the parties. Respondent
No. 2 herein, Mr. Sajjan Kumar Khaitan, is the proprietor of M/s. Hart
Video having his establishment in Kolkata. He is in the business of
distributing video cinematographic TV serials and telecasting regional
serials in the States of Eastern India, which includes the State of West
Bengal. M/s. BRTV, Mumbai, which is the producer of T.V. programmes, had
produced T.V. Serial named ‘Mahabharat’, original version whereof was in
Hindi. The said BRTV entrusted the sole and exclusive rights of
‘Mahabharat’ to M/s. Magnum T.V. Serials to dub the Hindi version of the
said serial in Bangla with further rights to exploit its Satellite, Pay TV,
DTH, IPTV, Video, Cable TV and internet rights till September, 2016.
Magnum TV, in turn, appointed Hart Video as the sub-assigner to dub the
said serial ‘Mahabharat’ in Bangla language, which it did. Thereafter, for
the purposes of telecasting the said dubbed serial, an agreement was
executed for the time slot, on revenue sharing basis, with M/s. Bengal
Media Pvt. Ltd., Kolkata, which is the owner of ‘Channel 10’, as well as
with M/s. Calcutta Television Network Private Ltd., Kolkata, which is the
owner of CTVN+ Channel. These two channels were given hard disks of four
episodes of the serial on 2nd February, 2011 and 12th February, 2011. An
advertisement was placed in Daily Newspapers on 19th February, 2011
informing the public at large that serial ‘Mahabharat’ would be telecast in
Bangla on Channel 10 at 10.00 a.m. in the morning and on CTVN+ at 10.00
p.m. every Sunday.

Certain producers in Eastern India have formed an association called
Eastern India Motion Picture Association (for short, ‘EIMPA’). Likewise,
the artists and technicians of film and television industry in West Bengal
have formed an association known as ‘Committee of Artists and Technicians
of West Bengal Film and Television Investors (hereinafter referred to as
the ‘Coordination Committee’).

Telecasting of serial ‘Mahabharat’ in Bangla after dubbing it in the said
language from the original produced Hindi language was not palatable to
EIMPA or the Coordination Committee. In their perception, serials produced
in other languages and shown on the T.V. Channels after dubbing them in
Bangla would affect the producers of that origin and, in turn, would also
adversely affect the artists and technicians working in West Bengal. The
apprehension was that it may deter production of such serials in Bangla
because of the entry of serials produced in other languages and shown to
the public by dubbing the same in their language. Because of this reason,
on 18th February, 2011 CTVN+ received a letter from the Coordination
Committee to stop the telecast of the dubbed serial ‘Mahabharat’. Letter
dated 1st March, 2011 to the similar effect was written by EIMPA to CTVN+.
Identical demands were made to this Channel by the Coordination Committee
as well. It was stated in this letter that such a step was necessary in
the interest of healthy growth of film and television industry in West
Bengal. It was also alleged that for the last thirteen years there was a
convention and practice adopted in the said region not to dub any programme
from other languages in Bangla and telecast them in West Bengal. Threat
was also extended to CTVN+ as well as Channel 10 that in case the telecast
is not stopped, their channels would face non-cooperation from these two
bodies, i.e., EIMPA and the Coordination Committee.

When Mr. Sajjan Khaitan (Respondent No. 2), Proprietor of M/s. Hart Video,
came to know of the aforesaid developments and the threat extended to CTVN+
and Channel 10 and found that these two television channels were going to
succumb to those pressures, he informed the CCI of the aforesaid details
and requested the CCI to take action in the matter, as according to him,
the aforesaid act on the part of EIMPA as well as the Coordination
Committee contravened the provisions of the Act. Even an interim relief
was sought in the nature of direction from CCI to CTVN+ and Channel 10 not
to yield to the threats of EIMPA and Coordination Committee and restart the
telecast of the serial which was stopped since 17th April, 2011.
Hereafter, Respondent No. 2 shall be described as the ‘informant’.

The CCI, after receiving the aforesaid information from the informant
formed a prima facie opinion that acts on the part of EIMPA and
Coordination Committee were anti-competitive. Accordingly, matter was
assigned to the Director General (DG) for detailed investigation as per the
procedure prescribed in the Act. On investigation, the DG found that the
details contained in the information supplied by the informant were
factually correct. On that basis, he examined the matter in the context of
provisions contained in the Act.

In order to understand with clarity the task undertaken and accomplished by
the DG, we deem it proper to refer to some of the relevant provisions of
the Act at this stage. Chapter II of the Act deals with ‘prohibition of
certain agreements, abuse of dominant position and regulation of
combinations’. It comprises of Sections 3 to 6. Section 3 deals with anti-
competitive agreements and Section 4 prohibits the abuse of dominant
position. Section 5, on the other hand, takes care of those acquisitions
and mergers which have the potential to become anti-competitive or attain
dominant position, with threat to abuse the said position in order to
control such acquisition and mergers. Section 6 empowers the CCI to
regulate those combinations which are stipulated under Section 5. Thus,
this Chapter deals with three kinds of practices which may be anti-
competitive, viz., agreements which may turn out to be anti-competitive;
abusive use of dominant position by those enterprises or groups which enjoy
such dominant position as defined in the Act; and regulations of
combination of enterprises by means of mergers or amalgamations so that
they do not become anti-competitive or abuse the dominant position which
they can attain.

The scheme of this Chapter, therefore, is to ensure fair competition by
prohibiting trade practices which cause appreciable adverse effects in
competition in markets within India. This task of curbing negative aspects
of competition is assigned to CCI. In the present case, since we are
concerned with the issue as to whether EIMPA and/or Coordination Committee
resorted to any anti-competitive agreement, it will be apposite to scan
through Section 3 of the Act and other provisions which revolve there
around. Section 3 reads as under :
“ 3. Anti-competitive agreements : (1) No enterprise or association of
enterprises or person or association of persons shall enter into any
agreement in respect of production, supply, distribution, storage,
acquisition or control of goods or provision of services, which causes or
is likely to cause an appreciable adverse effect on competition within
India.

(2) Any agreement entered into in contravention of the provisions
contained in subsection (1) shall be void.

(3) Any agreement entered into between enterprises or associations of
enterprises or persons or associations of persons or between any person and
enterprise or practice carried on, or decision taken by, any association of
enterprises or association of persons, including cartels, engaged in
identical or similar trade of goods or provision of services, which—

(a) directly or indirectly determines purchase or sale prices;

(b) limits or controls production, supply, markets, technical
development, investment or provision of services;

(c) shares the market or source of production or provision of services
by way of allocation of geographical area of market, or type of goods or
services, or number of customers in the market or any other similar way;

(d) directly or indirectly results in bid rigging or collusive bidding,
shall be presumed to have an appreciable adverse effect on competition:

Provided that nothing contained in this sub-section shall apply to any
agreement entered into by way of joint ventures if such agreement increases
efficiency in production, supply, distribution, storage,
acquisition or control of goods or provision of services.

Explanation.—For the purposes of this sub-section, “bid rigging” means any
agreement, between enterprises or persons referred to in sub-section (3)
engaged in identical or similar production or trading of goods or provision
of services, which has the effect of eliminating or reducing competition
for bids or adversely affecting or manipulating the process for bidding

(4) Any agreement amongst enterprises or persons at different stages or
levels of the production chain in different markets, in respect of
production, supply, distribution, storage, sale or price of, or trade in
goods or provision of services, including—

(a) tie-in arrangement;
(b) exclusive supply agreement;
(c) exclusive distribution agreement;
(d) refusal to deal;
(e) resale price maintenance,

shall be an agreement in contravention of sub-section (1) if such agreement
causes or is likely to cause an appreciable adverse effect on competition
in India.

Explanation.—For the purposes of this sub-section,—

(a) “tie-in arrangement” includes any agreement requiring a purchaser of
goods, as a condition of such purchase, to purchase some other goods;

(b) “exclusive supply agreement” includes any agreement restricting in
any manner the purchaser in the course of his trade from acquiring or
otherwise dealing in any goods other than those of the seller or any other
person;

(c) “exclusive distribution agreement” includes any agreement to limit,
restrict or withhold the output or supply of any goods or allocate any area
or market for the disposal or sale of the goods;

(d) “refusal to deal” includes any agreement which restricts, or is
likely to restrict, by any method the persons or classes of persons to whom
goods are sold or from whom goods are bought;

(e) “resale price maintenance” includes any agreement to sell goods on
condition that the prices to be charged on the resale by the purchaser
shall be the prices stipulated by the seller unless it is clearly stated
that prices lower than those prices may be charged.

(5) Nothing contained in this section shall restrict— (i) the right of
any person to restrain any infringement of, or to impose reasonable
conditions, as may be necessary for protecting any of his rights which have
been or may be conferred upon him under—

(a) the Copyright Act, 1957 (14 of 1957);

(b) the Patents Act, 1970 (39 of 1970);

(c) the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the
Trade Marks Act, 1999 (47 of 1999);

(d) the Geographical Indications of Goods (Registration and Protection)
Act, 1999 (48 of 1999); (e) the Designs Act, 2000 (16 of 2000); \

(f) the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37
of 2000);

(ii) the right of any person to export goods from India to the extent to
which the agreement relates exclusively to the production, supply,
distribution or control of goods or provision of services for such export.

As can be seen from the bare reading of the aforesaid provision, sub-
section (1) of Section 3 puts an embargo on an enterprise or association of
enterprises or person or association of persons from entering into any
agreement in respect of production, supply, distribution, storage,
acquisition or control of goods or provisions of services which causes or
is likely to cause an appreciable adverse effect on competition within
India. Thus, agreements in respect of distribution or provisions of
services, if they have adverse effect on competition, are prohibited and
treated as void by virtue of sub-section (2). Sub-section (3), with which
we are directly concerned, stipulates four kinds of agreements which are
presumed to have appreciable adverse effect on competition. Therefore, if
a particular agreement comes in any of the said categories, it is per se
treated as adversely effecting the competition to an appreciable extent and
comes within the mischief of sub-section (1). There is no further need to
have actual proof as to whether it has caused appreciable effect on
competition. Proviso thereto, however, exempts certain kinds of
agreements, meaning thereby if a particular case falls under the proviso,
then such a presumption would not be applicable.

We have already mentioned in brief the contents of letters which were
written by EIMPA and the Coordination Committee to the Channel 10 and
CTVN+. The DG was to investigate as to whether this ‘agreement’ falls
within the four corners of Section 3(3)(b) of the Act, namely, whether it
limits or controls production, supply, markets, technical development,
investment or provisions of services.

Section 2(b) defines ‘agreement’ and reads as under:
“2(b) “agreement” includes any arrangement or understanding or
action in concert,—

(i) whether or not, such arrangement, understanding or action is formal
or in writing; or

ii) whether or not such arrangement, understanding or action is intended
to be enforceable by legal proceedings ;”
Definitions of certain other expressions and terms which are required to be
noted are as follows:
“2 (l)“person” includes—

(i) an individual;

(ii) a Hindu undivided family;

(iii) a company;

(iv) a firm;

(v) an association of persons or a body of individuals, whether
incorporated or not, in India or outside India; or

(vi) any corporation established by or under any Central, State or
Provincial Act or a Government company as defined in section 617 of the
Companies Act, 1956 (1 of 1956);

(vii) any body corporate incorporated by or under the laws of a
country outside India;

(viii) a co-operative society registered under any law relating to
cooperative societies;

(ix) a local authority;

(x) every artificial juridical person, not falling within any of the
preceding sub-clauses.”

xx xx xx

2(m) “practice” includes any practice relating to the carrying on of any
trade by a person or an enterprise;

xx xx xx

2(r) “relevant market” means the market which may be determined by the
Commission with reference to the relevant product market or the relevant
geographic market or with reference to both the markets ;

2(s) “relevant geographic market” means a market comprising the area in
which the conditions of competition for supply of goods or provision of
services or demand of goods or services are distinctly homogenous and can
be distinguished from the conditions prevailing in the neighbouring areas;

2(t) “relevant product market” means a market comprising all those products
or services which are regarded as interchangeable or substitutable by the
consumer, by reason of characteristics of the products or services, their
prices and intended use;

2(u) “service” means service of any description which is made available to
potential users and includes the provision of services in connection with
business of any industrial or commercial matters such as banking,
communication, education, financing, insurance, chit funds, real
estate, transport, storage, material treatment, processing, supply of
electrical or other energy, boarding, lodging, entertainment, amusement,
construction, repair, conveying of news or information and advertising;

xx xx xx

2(x) “trade” means any trade, business, industry, profession or occupation
relating to the production, supply, distribution, storage or control of
goods and includes the provision of any services; ”
At this stage, we would like to refer to Section 19 of the Act which
permits the CCI to conduct an enquiry into certain kinds of agreements and
dominant position of enterprise. Sub-section (1) of Section 19 empowers
the Commission to inquire into any alleged contravention of the provisions
contained in sub-section (1) of Section 3 (i.e. anti-competitive
agreements) or sub-section (1) of Section 4 (i.e. abuse of dominant
position). Sub-section (3) deals with the factors which have to be kept in
mind by the CCI while undertaking an inquiry into anti-competitive
agreements and reads as under:

“19(3) The Commission shall, while determining whether an agreement
has an appreciable adverse effect on competition under section 3, have due
regard to all or any of the following factors, namely:

(a) creation of barriers to new entrants in the market;

(b) driving existing competitors out of the market;

(c) foreclosure of competition by hindering entry into the market;

(d) accrual of benefits to consumers;

(e) improvements in production or distribution of services; of goods or
provision

(f) promotion of technical, scientific and economic development by
means of production or distribution of goods or provision of services.
Since the appreciable adverse effect on competition has to be seen in the
context of ‘relevant market’ as defined under Section 2(r) of the Act
(already reproduced above), sub-section (5) of Section 19 stipulates that
in order to determine whether a market constitutes a ‘relevant market’ for
the purposes of this Act, CCI shall have due regard to the ‘relevant
geographic market’, and ‘relevant product market’. The factors which are
to be taken into account while determining relevant geographic market are
mentioned in sub-section (6) of Section 19. Likewise, the factors which are
to be taken into consideration while determining the relevant product
market are stipulated in sub-section (7) of Section 19.

Having noticed the relevant provisions postulating the scheme qua
prohibited anti-competitive agreements, on the basis of which investigation
is to be made by the DG, the first aspect was to determine as to what would
be the ‘relevant market’. The DG, in his report submitted to the CCI,
opined that in the instant case ‘relevant market’ would be the ‘film and
television industry of West Bengal’. He further recorded that the
Coordination Committee consisted of persons or association of persons who
were dealing with identical market of film making. In his opinion any
agreement of joint action taken by the constituents, being in the nature of
horizontal agreement, could be examined under the provisions of Section
3(3) of the Act. The impugned action of the Coordination Committee and
EIMPA threatening non-cooperation in case telecast of the serials was not
stopped and holding demonstrations as well as organising strike, which
resulted in actually stopping the telecast of the serial by Channel 10
(though CTVN+ continued to telecast), amounted to restricting its
commercial exploitation and was, therefore, unjustified. He found that
following conduct of the Coordination Committee specifically contravened
the provisions of the Act:
“a. Act of the Co-ordination Committee writing a letter on 18.02.2011 to
CCTVN Plus Channel asking it to stop the telecasting of Mahabharata serial.

b. Further, act of the Co-ordination Committee writing a letter on
01.03.2011 to Channel 10 and letters on 11.03.2011, 12.03.2011 and
14.03.2011 to CTVN Plus Channel asking them to stop the telecast of
Mahabharata serial.

c. Observance of one-day work stoppage on 07.04.2011 against telecast of
the Mahabharata serial by the members of all the constituents of Co-
ordination Committee and demonstration on the same day from 11.00AM to
02.00PM at Rani Rasoni Road in Kolkata.

d. The Co-ordination Committee approached Shri Mithun Chakraborty, the
leading actor of Indian Film Industry and the Chief Adviser of Channel 10
and finally succeeded in getting the telecast of Mahabharata stopped by
Channel 10.”
The DG concluded that the action on the part of Coordination Committee had
resulted in foreclosure of competition by hindering entry into the market.
The DG also held that by not allowing the dubbed version of the serial, the
Coordination Committee foreclosed the business opportunities for the
businessmen engaged in the production, distribution, and exhibition,
telecast of such programmes. The DG, therefore, concluded that the actions
on the part of EIMPA and Coordination Committee were in violation of the
provisions of Section 3(3)(b) of the Act, since they restricted and
controlled the market and supply of dubbed versions of serials on the
Television Channels through collective intent of all the
constituents/associations coming together on one platform.

Certain fundamental objections were taken by the Coordination Committee as
well as EIMPA touching upon the jurisdiction of the DG to inquire into the
matter as according to them the inquiry was beyond the scope of the Act.
In nutshell, it was argued:
(a) The Coordination Committee comprised of artists and technicians of
West Bengal Film and T.V. Industry and consisted of West Bengal Motion
Picture Artists’ Forum and Federation of Cine Technicians and Workers of
Eastern India only. The other members like WATP, ATA and EIMPA were not in
the Coordination Committee. It was, in fact, a trade union of the artisans
and technicians under the Trade Union Act. Therefore, the Coordination
Committee was not an ‘enterprise’.
Likewise, it was not a ‘person or ‘association of persons’ who were
in the business of production, supply and distribution or providing
services etc. Therefore, their act would not fall under Section 3(1) of
the Act.
(b) It was argued that the Coordination Committee was not in a position
to control production programming marketing and uplinking of any serial in
the satellite channel and, therefore, provisions of the Act would not apply
to it.
(c) According to the Coordination Committee, the action which they had
taken was in the form of an agitation against the telecast of Hindi serial
after dubbing the same into Bangla in order to safeguard the interest of
its members. It was their constitutional right to lodge such protests
under Article 19(1)(a) of the Constitution of India.

The DG, however, did not get convinced with the aforesaid defence put by
the Coordination Committee and found that the agitation of the Coordination
Committee was uncalled for inasmuch as there was a huge potential of local
film artists, and the industry was not likely to suffer on account of the
dubbed serials shown on the said channels. He also found the industry of
television channels in Bangla was growing by leaps and bounds and,
therefore, argument of the Coordination Committee was not based on facts.
Thus, their action was held to be unjustified, as it had resulted in
foreclosure on competition by entering into the market as well as
foreclosure of business opportunities for the businessmen engaged in the
production, distribution and exhibition/telecast of such programmes. This,
according to him, came within the mischief of Section 3(3)(b) of the Act.

Against the aforesaid report of the DG, being adverse to the Coordination
Committee as well as EIMPA, both of them preferred their objections before
the CCI. These objections were almost on the same lines which were taken
before the DG and, therefore, it is not necessary to repeat the same at
this stage inasmuch as we would be turning to the stand of the Coordination
Committee at the appropriate stage, in any case.

The CCI, after scanning through those objections, formulated two questions
which according to it fell for consideration. These are:
Issue 1
Whether EIMPA and Co-ordination Committee imposed/attempted to impose
restrictions on the telecast of dubbed serial ‘Mahabharat’?
Issue 2
Whether the act and conduct of imposing restrictions on telecast of
the said serial is in violation of provisions of the Act?

The CCI gave a fractured verdict on the aforesaid issues. As per the
majority, the complainant was able to give clinching evidence thereby
proving both the issues. The majority held that Channel 10 stopped the
telecast of serial as a direct consequence of the threats extended to it by
EIMPA as well as Coordination Committee through their various letters
coupled with the agitations and demonstration held by them. In this manner,
pressures were exerted on both Channel 10 and CTVN+ not to telecast the
dubbed serial, though as far as CTVN+ is concerned it did not succumb to
such a pressure. But Channel 10 gave in by discontinuing the telecast of
the serial. In this manner, first issue was decided in the affirmative.
Taking up the second issue, the majority members held that since the
Coordination Committee was not an ‘enterprise’, question of breach of
Section 4 did not arise. However, the activities of the Coordination
Committee fell within the ambit of Section 3 of the Act and violated that
provision since it had adverse effect on competition. It accepted that the
Coordination Committee (and for that matter even EIMPA) were trade unions.
Notwithstanding, they were not exempted from the purview of the Act. Qua
the Coordination Committee specifically, the CCI was influenced by the fact
that even when bodies like WATP, ATA and EIMPA were not members of the
Coordination Committee, still it was found that the Coordination Committee
takes the measures in consultation with these associations and, therefore,
the Coordination Committee must be deemed to be comprised of all the five
members.

Judicial member in the CCI put discordant note as he differed from the
majority opinion. According to him, first mistake committed by the DG was
that he did not identify the ‘relevant market’ correctly. According to him,
‘relevant market’ was ‘broadcast of TV serial’ and not ‘Film and TV
Industry of West Bengal’ as found by the DG. After identifying the
relevant market as broadcast of TV serials, learned member opined that
broadcast of TV serials took place either by way of Direct to Home Services
(DTH) or through Cable and, therefore, broadcasting service is altogether a
separate market, different from production, exhibition and distribution of
films. Insofar as the two channels, namely, CTVN+ and Channel 10 are
concerned, they were in the market for telecasting programmes for the
viewers of the DTH category or Cable TV category and were not in
production, distribution or exhibition of dubbed films. According to the
minority view, since the offending parties, i,e., Coordination Committee
and EIMPA, were not active in the relevant market of broadcast of dubbed TV
serials, there was no question of any violation of any provisions of the
Act. It was further held that Section 3 of the Act does not take into its
fold coercive actions taken by workers’ union affecting the various facets
or products or service market, affecting production, distribution and
supply of goods or services. It was accepted that, as a matter of fact,
the Coordination Committee as well as EIMPA had put pressure on these
channels from broadcasting the dubbed TV serial in question through various
means. However, it could not be treated as an economic pressure. It was
an act of trade union putting such pressures which was outside the domain
of the Act and not an ‘agreement’ amongst the enterprises, active in the
same relevant market, which resulted in discontinuing the telecast of
dubbed serials. Further, the TV channels were at liberty to ignore such
coercive facts. The minority opinion went to the extent of expressing that
right to hold dharnas, boycotts, strikes etc. was fundamental right of any
trade union guaranteed under Article 19(1)(a) of the Constitution which
could not be taken away by the Act, unless it is shown that the offending
parties were involved in economic activities in the same ‘relevant market’
and they had entered into an ‘agreement’ which finds foul with the
provisions of Section 3 of the Act.

Significantly, it is only the Coordination Committee which preferred the
appeal before the Competition Appellate Tribunal (hereinafter referred to
as the ‘Tribunal’). EIMPA, by its conduct, accepted the majority decision
of the CCI. It is for this reason the Tribunal did not go into the issue
with reference to EIMPA. It discussed the stand of the Coordination
Committee and deliberated itself confining to the activities of the
Coordination Committee to find out whether majority view of CCI was correct
in law. By the impugned judgment, it has held otherwise thereby setting
aside the majority view and accepting the minority opinion of the CCI
resulting into allowing the appeal of the Coordination Committee and
holding that there is no contravention of Section 3 of the Act which could
not even be invoked on the facts of this case. In the first place, the
Tribunal has affirmed the opinion of the dissenting member of the CCI on
the question of ‘relevant market’ by holding that it was not the ‘Film and
Television Industry in the State of West Bengal’, but the relevant market
was the ‘telecasting of the dubbed serial on television in West Bengal’.
Thereafter, the Tribunal took note of the provisions of Section 3(3) of the
Act and concluded that the Coordination Committee was not trading in any
groups, or provisions of any services, much less by the persons engaged in
identical or similar trade or provisions of services. Therefore, it could
not be said that there was any ‘agreement’ as envisaged in Section 3
entered into. According to the Tribunal, Section 3(3)(b) of the Act
applies to the competitors who would be in the same line of commercial
activity and by their agreement tend to restrict the competition. No
evidence to this effect was available in the instant case. It was merely a
protest of the Coordination Committee voicing its grievance for the benefit
of its members and even if such a move on the part of the Coordination
Committee was wrong and even if its agitation was influenced by foul play
in projecting that exhibiting dubbed TV serial would affect their prospects
of getting further work, that by itself would not become a competition
issue covered by the Act.

Challenging the aforesaid view of the Tribunal, Mr. Chandhiok, learned
senior advocate appearing for the CCI, referred to the various provisions
of the Act and also extensively read out from the exercise undertaken by
the DG and the majority view of the CCI. His submission was that exercise
undertaken by the DG and approved by the CCI in its majority decision was
correct in law. He questioned the manner in which ‘relevant market’ has
been assigned limited sphere as, according to him, the matter related to
film and television industry of the State of West Bengal and the concerted
action of the Coordination Committee was to obviously effect the
competitiveness in the entire film and television industry of the State of
West Bengal. He also read out various definitions from the Act, which we
have already reproduced above. His submission was that the definition of
‘agreement’ contained in Section 2(b) had a much wider connotation and any
such agreement which was anti-competitive in nature between persons or
association of persons was hit by Section 3.

Learned counsel appearing for the Coordination Committee, on the other
hand, heavily relied upon the impugned judgment and submitted that the
conclusion drawn therein was correct in law as the Coordination Committee,
which was in the nature of a trade union, and not in the business of
production, supply, distribution, storage, acquisition or control of goods
or provision of services, could not be covered within the scope of Section
3 of the Act. He also submitted that the action on the part of the
Coordination Committee had nothing to do with the competition and it was
the fundamental right of the Coordination Committee, as a trade union, to
lodge legitimate protest. He submitted that even if in this protest the
Coordination Committee had exceeded the limits, that may be an action
actionable under any other law but would not fall within the domain of
Competition Law.

We have given our due consideration to the respective submissions and have
minutely gone through the orders passed by various authorities, glimpse
whereof is already reflected above.

Two fundamental aspects which need determination are:
(i) What is the ‘relevant market’ for the purposes of inquiry into
the impugned activity of the Coordination Committee? and
(ii) Whether the action and conduct of the Coordination Committee is
covered by the provisions of Section 3 of the Act?

Before we discuss the aforesaid questions, it would be necessary to clear
the air on some of the fundamental aspects relating to the Act.

The Competition Act of 2002, as amended in 2007 and 2009, deals with anti-
trust issues, viz. regulation of anti-competitive agreements, abuse of
dominant position and a combination or acquisition falling within the
provisions of the said Act. Since the majority view of the CCI also
accepted that the impugned activities of the Coordination Committee did not
amount to abuse of dominant position, and it treated the same as anti-
competitive having appreciable adverse effect on competition, our
discussion would be focused only on anti-competitive agreements. Section 3
of the Act is the relevant section in this behalf. It is intended to curb
or prohibit certain agreements. Therefore, in the first instance, it is to
be found out that there existed an ‘agreement’ which was entered into by
enterprise or association of enterprises or person or association of
persons. Thereafter, it needs to be determined as to whether such an
agreement is anti-competitive agreement within the meaning of the Act.
Once it is found to be so, other provisions relating to the treatment that
needs to be given thereto get attracted.

While inquiring into any alleged contravention, whether by the Commission
or by the DG, and determining whether any agreement has an appreciable
adverse effect on competition under Section 3, factors which are to be
taken into consideration are mentioned in sub-section (3) of Section 19,
which are as follows:
“19. Inquiry into certain agreements and dominant position of enterprise. –
xx xx xx

(3) The Commission shall, while determining whether an agreement has an
appreciable adverse effect on competition under section 3, have due regard
to all or any of the following factors, namely:-

(a) creation of barriers to new entrants in the market;

(b) driving existing competitors out of the market;

(c) foreclosure of competition by hindering entry into the market;

(d) accrual of benefits to consumers;

(e) improvements in production or distribution of goods or provision of
services;

(f) promotion of technical, scientific and economic development by means
of production or distribution of goods or provision of services.

xx xx xx”
The word ‘market’ used therein has reference to ‘relevant market’. As per
sub-section (5) of Section 19, such relevant market can be relevant
geographic market or relevant product market. The factors which are to be
kept in mind while determining the relevant geographic market are
stipulated in sub-section (6) of Section 19 and the factors which need to
be considered while determining the relevant product market are prescribed
in sub-section (7) of Section 19. These two sub-sections read as under:
“(6) The Commission shall, while determining the “relevant geographic
market’, have due regard to all or any of the following factors, namely:-

(a) regulatory trade barriers;

(b) local specification requirements;

(c) national procurement policies;

(d) adequate distribution facilities;

(e) transport costs;

(f) language;

(g) consumer preferences;

(h) need for secure or regular supplies or rapid after-sales services.
(7) The Commission shall, while determining the “relevant product market”,
have due regard to all or any of the following factors, namely:-

(a) physical characteristics or end-use of goods;

(b) price of goods or service;

(c) consumer preferences;

(d) exclusion of in-house production;

(e) existence of specialised producers;

(f) classification of industrial products.”

It is for this reason, the first and foremost aspect that needs
determination is: ‘What is the relevant market in which competition is
effected?”

Market definition is a tool to identify and define the boundaries of
competition between firms. It serves to establish the framework within
which competition policy is applied by the Commission. The main purpose of
market definition is to identify in a systematic way the competitive
constraints that the undertakings involved face. The objective of defining
a market in both its product and geographic dimension is to identify those
actual competitors of the undertakings involved that are capable of
constraining those undertakings behaviour and of preventing them from
behaving independently of effective competitive pressure.
Therefore, the purpose of defining the ‘relevant market’ is to
assess with identifying in a systematic way the competitive constraints
that undertakings face when operating in a market. This is the case in
particular for determining if undertakings are competitors or potential
competitors and when assessing the anti-competitive effects of conduct in a
market. The concept of relevant market implies that there could be an
effective competition between the products which form part of it and this
presupposes that there is a sufficient degree of interchangeability between
all the products forming part of the same market insofar as specific use of
such product is concerned.

While identifying the relevant market in a given case, the CCI is required
to look at evidence that is available and relevant to the case at hand.
The CCI has to define the boundaries of the relevant market as precisely as
required by the circumstances of the case. Where appropriate, it may
conduct its competition assessment on the basis of alternative market
definitions. Where it is apparent that the investigated conduct is unlikely
to have an adverse effect on competition or that the undertaking under
investigation does not possess a substantial degree of market power on the
basis of any reasonable market definition, the question of the most
appropriate market definition can even be left open.

The relevant market within which to analyse market power or assess a given
competition concern has both a product dimension and a geographic
dimension. In this context, the relevant product market comprises all
those products which are considered interchangeable or substitutable by
buyers because of the products’ characteristics, prices and intended use.
The relevant geographic market comprises all those regions or areas where
buyers would be able or willing to find substitutes for the products in
question. The relevant product and geographic market for a particular
product may vary depending on the nature of the buyers and suppliers
concerned by the conduct under examination and their position in the supply
chain. For example, if the questionable conduct is concerned at the
wholesale level, the relevant market has to be defined from the perspective
of the wholesale buyers. On the other hand, if the concern is to examine
the conduct at the retail level, the relevant market needs to be defined
from the perspective of buyers of retail products.

It is to be borne in mind that the process of defining the relevant market
starts by looking into a relatively narrow potential product market
definition. The potential product market is then expanded to include those
substituted products to which buyers would turn in the face of a price
increase above the competitive price. Likewise, the relevant geographic
market can be defined using the same general process as that used to define
the relevant product market.

Bearing in mind the aforesaid considerations, we concur with the conclusion
of the Tribunal. It is the notion of ‘power over the market’ which is the
key to analysing many competitive issues. Therefore, it becomes necessary
to understand what is meant by the relevant market. This concept is an
economic one.

In the instant case, the geographic market is the State of West Bengal and
to this extent there is no quarrel inasmuch as activities of the
Coordination Committee were limited to the said State. The dispute is as
to whether relevant market would cover ‘broadcast of TV serial’ or it would
take within its sweep ‘film and TV industry of the State of West Bengal’.
TV serial in question was produced in Hindi. It was thereafter dubbed in
Bangla. When the two channels, namely CTVN+ and Channel 10, decided to
broadcast this TV serial in dubbed form, i.e. in Bangla language, this move
was opposed by the Coordination Committee and EIMPA. The Tribunal has
upheld the minority view of CCI in saying that nature of the information
does not show anything which could even be distinctly connected with the
whole ‘film and television industry in the State of West Bengal’. The
information is only against showing the dubbed serial on the television and
it has no relation whatsoever with production, distribution, etc. of any
film or any other material on the TV channels.
We feel that this is a myopic view taken by the Tribunal which
ignores many other vital aspects of this case, most important being the
width of the effect of the aforesaid cause on which the agitation was led
by the Coordination Committee. The effect is not limited to the telecast
or broadcast of the television serial. No doubt, the Coordination
Committee was against the ‘broadcast of the television serial ‘Mahabharat’
on the aforesaid two channels, in the dubbed form. However, even as per
the agitators, the said broadcast was going to adversely affect the TV and
Film Industry of West Bengal and the alleged purport behind the threats was
to save the entire TV and Film Industry. The Coordination Committee itself
mentioned so in its letter dated February 18, 2012 as under:
“We came to know that you are publicizing in your channel that Bengali
dubbed version of “Mahabharat” will be telecasted in your channel, shortly
this is for your kind information that the whole TV and Film Industry had
fought back ruthlessly against telecast of Bengali dubbed versions of Hindi
serials in DD-1 slot in 1997 and since that agitation DD National Network
has stopped telecasting any Bengali dubbed version of Hindi programs. At
the same time, it is to be noted that the film industry was also successful
in debarring the release of Bengali dubbed version of Hindi Movie “Luv
Kush” produced by Mr. Dilip Kankaria of Deluxe Films in the year 1997.

We have done this to stop withering away of the prestigious and
internationally acclaimed Bengali Film and Television Industry, thereby
creating job for artistes, workers and allied people associated with this
industry.

Hence we would request you to stop telecast of dubbed Bengali version of
“Mahabharat” in your channel.
(emphasis added)”
The relevant market was, therefore, not limited to the broadcasting of the
channel but entire film and television industry of West Bengal. Whether it
was the misgiving of the Coordination Committee that telecast of dubbed
version of ‘Mahabharat’ is going to affect Bengali film and television
industry or it was a genuine concern, is not the relevant factor while
defining the ‘relevant market’[1]. It is the sweep of the aforesaid action
which is to be considered. Even in the perception of the Coordination
Committee, telecast of Bengali dubbed version of ‘Mahabharat’ was going to
affect the whole Television and Film Industry. In view thereof, it was
hardly a matter of debate as to what would be the relevant market.
With this we advert to the central issue that bogs the parties, namely,
whether the activities in which the Coordination Committee indulged in can
be treated as ‘agreement’ for the purpose of Section 3 of the Act.

At the outset, it may be noticed that the entities which are roped in,
whose agreements can be offending, are enterprise or association of
enterprises or person or association of persons or where the agreement is
between any person and an enterprise. The expression ‘enterprise’ may
refer to any entity, regardless of its legal status or the way in which it
was financed and, therefore, it may include natural as well as legal
persons. This statement gets further strengthened as the agreement entered
into by a ‘person’ or ‘association of persons’ are also included and when
it is read with the definition of ‘person’ mentioned in Section 2(l) of the
Act. Likewise, definition of ‘agreement’ under Section 2(b) is also very
widely worded. Not only it is inclusive, as the word ‘includes’ therein
suggests that it is not exhaustive, but also any arrangement or
understanding or even action in concert is termed as ‘agreement’. It is
irrespective of the fact that such arrangement or understanding is formal
or informal and the same may be oral as well and it is not necessary that
the same is reduced in writing or whether it is intended to be enforceable
by legal proceedings or not. Therefore, the Coordination Committee would
be covered by the definition of ‘person’. However, what is important is
that such an ‘agreement’, referred to in Section 3 of the Act has to relate
to an economic activity which is central to the concept of Competition Law.
Economic activity, as is generally understood, refers to any activity
consisting of offering products in a market regardless of whether the
activities are intended to earn a profit. Some examples may be given which
would not be covered by Section 3(3) of the Act. An individual acting as a
final consumer is not an enterprise or a person envisaged, as he is not
carrying on an economic activity. We may also mention that the European
Union Competition Law recognises that an entity carrying on an activity
that has an exclusively social function and is based on the principle of
solidarity is not likely to be treated as carrying on an economic activity
so as to qualify the expressions used in Section 3. The reason is obvious.
The ‘agreement’ or ‘concerted practice’ is the means through which
enterprise or association of enterprises or person or association of
persons restrict competition. These concepts translate the objective of
Competition Law to have economic operators determine their commercial
policy independently. Competition Law is aimed at frowning upon the
activities of those undertakings (whether natural persons or legal
entities) who, while undertaking their economic activities, indulge in
practices which effect the competition adversely or take advantage of their
dominant position.

The notion of enterprise is a relative one. The functional approach and
the corresponding focus on the activity, rather than the form of the entity
may result in an entity being considered an enterprise when it engages in
some activities, but not when it engages in others. The relativity of the
concept is most evident when considering activities carried out by non-
profit-making organisations or public bodies. These entities may at times
operate in their charitable or public capacity but may be considered as
undertakings when they engage in commercial activities. The economic
nature of an activity is often apparent when the entities offer goods and
services in the marketplace and when the activity could, potentially, yield
profits. Thus, any entity, regardless of its form, constitutes an
‘enterprise’ within the meaning of Section 3 of the Act when it engages in
economic activity. An economic activity includes any activity, whether or
not profit making, that involves economic trade.

In the instant case, admittedly the Coordination Committee, which may be a
‘person’ as per the definition contained in Section 2(l) of the Act, is not
undertaking any economic activity by itself. Therefore, if we were to look
into the ‘agreement’ of such a ‘person’, i.e. Coordination Committee, it
may not fall under Section 3(1) of the Act as it is not in respect of any
production, supply, distribution, storage, acquisition or control of goods
or provision of services. The Coordination Committee, which is a trade
union acting by itself, and without conjunction with any other, would not
be treated as an ‘enterprise’ or the kind of ‘association of persons’
described in Section 3. A trade union acts as on behalf of its members in
collective bargaining and is not engaged in economic activity. In such
circumstances, had the Coordination Committee acted only as trade
unionists, things would have been different. Then, perhaps, the view taken
by the Tribunal could be sustained. However, what is lost in translation
by the Tribunal i.e. in applying the aforesaid principle of the activity of
the trade union, is a very pertinent and significant fact, which was taken
note of by the DG as well as the CCI in its majority opinion. It is this:
The Coordination Committee (or for that matter even EIMPA) are, in fact,
association of enterprises (constituent members) and these members are
engaged in production, distribution and exhibition of films. EIMPA is an
association of film producers, distributors and exhibitors, operating
mainly in the State of West Bengal. Likewise, the Coordination Committee
is the joint platform of Federation of Senior Technician and Workers of
Eastern India and West Bengal Motion Pictures Artistes Forum. Both EIMPA
as well as the Coordination Committee acted in a concerted and coordinated
manner. They joined together in giving call of boycott of competing
members i.e. the informant in the instant case and, therefore, matter
cannot be viewed narrowly by treating Coordination Committee as a trade
union, ignoring the fact that it is backing the cause of those which are
‘enterprises’. The constituent members of these bodies take decision
relating to production or distribution or exhibition on behalf of the
members who are engaged in the similar or identical business of production,
distribution or exhibition of the films. Decision of these two bodies
reflected collective intent of the members. When some of the members are
found to be in the production, distribution or exhibition line, the matter
could not have been brushed aside by merely giving it a cloak of trade
unionism. For this reason, the argument predicated on the right of trade
union under Article 19, as professed by the Coordination Committee, is also
not available.

When the lenses of the reasoning process are duly adjusted with their focus
on the picture, the picture gets sharpened and haziness disappears. One
can clearly view that prohibition on the exhibition of dubbed serial on the
television prevented the competing parties in pursuing their commercial
activities. Thus, the CCI rightly observed that the protection in the name
of the language goes against the interest of the competition, depriving the
consumers of exercising their choice. Acts of Coordination Committee
definitely caused harm to consumers by depriving them from watching the
dubbed serial on TV channel; albeit for a brief period. It also hindered
competition in the market by barring dubbed TV serials from exhibition on
TV channels in the State of West Bengal. It amounted to creating barriers
to the entry of new content in the said dubbed TV serial. Such act and
conduct also limited the supply of serial dubbed in Bangla, which amounts
to violation of the provision of Section 3(3)(b) of the Act.

Resultantly, the instant appeal of CCI stands allowed.
No costs.

………………………………………J.
(A.K. SIKRI)

………………………………………J.
(ABHAY MANOHAR SAPRE)

NEW DELHI;
MARCH 07, 2017.
———————–
[1] It may be observed that majority view of CCI has rejected the plea of
the Coordination Committee as well as EIMPA that allowing the dubbed film
will take away jobs from Bengali artistes according to CCI: “If the Bengali
films and TV serials are preferred over the non-Bengali content as a result
of competitive process, ultimately the Bengali artists will get benefited.
The protectionist policies which are being followed will not come to the
aid of Bengali artistes, if on content they cannot compete. Such policies
are anti-thesis of the principles of free market.”

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